South Africa's 'spaza' shops suffer as big retail rolls in

Sun Apr 20, 2014 5:04am EDT
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By David Dolan

SOWETO, South Africa (Reuters) - In this corner of South Africa's black township of Soweto, the biggest building used to be the Catholic church. Now it's been overshadowed by a shopping center and business has only gotten worse for Grace, a 68-year-old shopowner.

Like many proprietors of "spaza" shops - the informal stores that dot township corners - Grace barely manages to keep afloat as more of her neighbors head to the mall.

"Once people get paid, they buy their groceries at the malls," she said, sitting among dusty shelves of tea-bags, small packets of biscuits, loose cigarettes and butter.

"They used to buy their groceries from us. Now they only come for daily items," she said, declining to give her last name.

Grace has been running the shop with her husband since 1993, the year before South Africa's first all-race elections. They used to earn around 1,500 rand ($140) a day, but are down to a third of that now.

During apartheid, blacks were crammed together in squalid townships miles away from cities. Some residents began to sell staples such as maize meal and cooking oil out of their own homes. The informal stores became known as tuck shops or "spazas," a slang word that connotes "just getting by".

Along with shebeens, or corner taverns, spazas are one of the most visible parts of township life, and a major component of South Africa's vast informal economy.

While recent data on the informal economy is hard to come by, a 2002 study by the University of South Africa's Bureau of Market Research (BMR) estimated that spaza shops brought in around $705 million a year, employing up to 290,000 people.   Continued...

Residents stand outside a spaza convienience shop in Cape Town's Imizamo Yethu township, April 19, 2014. REUTERS/Mike Hutchings